This is a common name for a small scam around the urban areas of Canada, Sao Paolo, Brazil and certain parts of the Caribbean (namely Jamaica). This is a low level hustle where the scammer puts a lot of effort for a very small reward, usually under $10 or equivalent in goods. Due to the small amounts taken the person (usually a friend or acquaintance) being scammed doesn't even realize they have been fooled until much later.

Coming over to somebody's house and stealing their change/boxer shorts/food etc...."I think I just got leo-scammed"

When leaving a taxi with several friends the scammer will pretend to have a phone call and be unable to contribute to the fare......"Did he just leo-scam me?"